40-story high-rise to be the giant of rental property near Market Square

Rendering of a 40-story residential tower planned for a downtown site next to Market Square Park designed by Jackson & Ryan. (Courtesy of Woodbranch Investments Corp.)

Rendering of a 40-story residential tower planned for a downtown site next to Market Square Park designed by Jackson & Ryan. (Courtesy of Woodbranch Investments Corp.)

Photo: Courtesy Of Woodbranch Investmen

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A 40-story downtown tower with 463 apartments in it will be built just off Market Square Park on the southern half of the block bounded by Preston, Louisiana, Milam and Congress.

A 40-story downtown tower with 463 apartments in it will be built just off Market Square Park on the southern half of the block bounded by Preston, Louisiana, Milam and Congress.

Photo: J.R. Gonzales

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A 40-story downtown tower with 463 apartments in it will be built just off Market Square Park on the southern half of the block bounded by Preston, Louisiana, Milam and Congress.

A 40-story downtown tower with 463 apartments in it will be built just off Market Square Park on the southern half of the block bounded by Preston, Louisiana, Milam and Congress.

Photo: J.R. Gonzales

Image 4 of 5

A 40-story downtown tower with 463 apartments in it will be built just off Market Square Park on the southern half of the block bounded by Preston, Louisiana, Milam and Congress.

A 40-story downtown tower with 463 apartments in it will be built just off Market Square Park on the southern half of the block bounded by Preston, Louisiana, Milam and Congress.

Photo: J.R. Gonzales

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Many businesses have opened since Market Square Park was redeveloped.

Many businesses have opened since Market Square Park was redeveloped.

Photo: Joyce Lee, HC Staff

Record size residential project set to rise downtown

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A developer plans to break ground next month on what will be downtown's tallest residential tower, a project symbolic of this city's healthy economy and downtown's growing emergence as a place to call home.

The Texas-sized tower is set to rise 40 stories and house 463 apartments built to almost-condominium standards, the developers said Monday.

"This is not a starter apartment," said Philip Schneidau, president of developer Woodbranch Investments Corp. "This is for someone who's gotten a promotion."

The tower will be one of two new multifamily projects planned for this section of downtown.

At Travis and Preston on the other side of Market Square Park, developer Hines has blueprinted a luxury residential building. That project is slated to rise 33 stories.

Several more residential projects are under way or proposed in the broader downtown area. Many of the new buildings have been approved to participate in the city's Downtown Living Initiative, which provides a $15,000 per unit tax rebate to developers who add residential housing in the city's core.

Through the incentive, Woodbranch stands to benefit by nearly $7 million. The company declined to disclose the project's cost.

Apartment construction has been on the rise downtown and in surrounding neighborhoods to the west where some 4,000 units are under construction, according to MPF Research, a multifamily industry consulting and data firm.

Occupancy in that area is 94.5 percent and rents are rising faster than greater Houston as a whole.

The market is being fueled by new jobs and a growing desire to live closer to employment centers, experts said. Many young Houstonians, too, are putting off buying a house while some longtime owners are selling in favor of apartment living.

"People are selling their homes with the ability to make a handsome profit and moving into very nice multifamily to see if they would like living there and to see if they want a smaller home," said Pat Kiley, principal of Kiley Advisors, a consulting firm to the construction industry.

Greg Willett, MPF's head of analysis, said downtown has a limited demand for such high-end units, but it has by no means been filled.

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Downtown, he said has been undersupplied relative to the employment base.

"You reach a certain point where you cross a threshold where you get enough product with retail and support services that it becomes a more attractive living environment," he said. "It looks like Houston has probably crossed that level."

In Market Square Tower, typical units will range from 550-square-foot efficiencies to three-bedroom, three-bath spaces with around 1,950 square feet. Rents will range from around $1,800 to $5,800 per month. The average unit will have more than 1,275 square feet and rent for approximately $3,500. There will be a limited number of larger penthouses as well.

Jackson & Ryan Architects designed the building, whose address will be 777 Preston. A 10-story garage that shares the tower's block will serve residents of the new building. The garage has 1,100 spaces now, but that number will be reduced to about 950 as the property is refigured.

About 150 spaces will be reserved for residents' guests and visitors of some 22,000 square feet of retail space planned for the first floor.

The garage will continue to operate to the public and with its existing contracts until the building is completed

Excavation work is expected to start by mid August, and initial occupancy is slated for January 2017.

Harvey Builders is the general contractor, and Greystar Management Services will lease and manage the property. A New York family is contributing the equity for the project, and Pacific Life Insurance Co. is providing construction financing.

In addition to standard amenities, the building will have a half-court indoor basketball court, a virtual golf simulator, a screening room with recliners, a banquet room and two swimming pools. A second-story deck will overlook Market Square Park and have palm trees, cabanas, a swimming pool and a hot tub. A spa with sauna, steam rooms and treatment rooms will be next to the pool.

Perhaps most unique, said Woodbranch's Philip Schneidau, will be the wraparound rooftop amenities with panoramic views of the city skyline and Buffalo Bayou Park. Those features will include a gym, sundeck and "sky pool" that will be encased in glass and cantilever beyond the southern face of the building.

Bob Eury, executive director of the Houston Downtown Management District, estimates rental occupancy in the central business district to be in the low to mid 90-percent range.While he does not see any signs of the market slowing, Eury acknowledges what a project the size of Market Square Tower means.

"In a competitive market, it will take some time for them to lease it," he said